Pension Plans Need Income

Several members of our client service team recently attended an event where a representative from a large consultant group discussed what clients expect from asset managers.  The biggest takeaway from the presentation was the need to address ongoing funding issues for pension plans.  According to the consultant, lack of asset growth compared to liability growth has put some plans in the unpleasant position of having to sell assets to pay distributions.  This is commonly referred to as the “death spiral” because selling assets lowers the potential for compounding returns and further reduces the funding status of pension plans.

At Boyd Watterson, we strive to build strategies focused on stable sources of income that increase consistency in returns. We believe these strategies aid investors in addressing one of their primary concerns in this low-interest-rate environment.

The views expressed herein are presented for informational purposes only and are not intended as a recommendation to invest in any particular asset class or security or as a promise of future performance.  The information, opinions, and views contained herein are current only as of the date hereof and are subject to change at any time without prior notice.